Is Crowdfunding Worth It?

Is Crowdfunding Worth It?

Crowdfunding is a business strategy where you raise a small amount of capital from a large number of individuals. This is usually through the use of the internet. But is crowdfunding really worth it? From episode 94 of Startup Hustle, Matt DeCoursey and Matt Watson dig into the concept of crowdfunding and reveals if this actually works for startups.

Crowdfunding became a trend for a lot of small businesses. The idea is to use the vast and easy access to social media, as well as crowdfunding websites, to bring investors and entrepreneurs to finance a business.

An individual goes and pitches an idea to waiting investors and entrepreneurs, then they provide the funding. These are usually done by crowdfunding sites like Kickstarter and IndieGoGo. These sites generate revenue from the funds raised from each campaign.

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An American crowdfunding website founded in 2008, IndieGoGo allows people to solicit funding for charity, product ideas, or startups.

Successful Campaigns:

  • Opal Nugget Ice Maker – raised $2.8 million
  • Geek Pulse DAC – raised $3 million
  • Con Man – raised $3.2 million
  • Micro Drone 3.0 – raised $3.5 million
  • Jibo – raised $3.7 million
  • An Hour of Code for Every Student – raised $5 million

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A global crowdfunding platform based in Brooklyn, New York. Kickstarter’s mission is to bring creative projects to life that is why they are mostly geared to helping artists, musicians, filmmakers, designers, and other creators in making their great ideas to reality.

Successful Campaigns:

  • Pebble time smartwatch – raised $20 million
  • Coolest cooler – raised $13.3 million
  • Kingdom death monster – $12.4 million
  • Baubax travel jacket – $9.2 million
  • Exploding kittens – $8.8 million
  • Ouya video game console – $8.6 million
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Is Crowdfunding worth it?

At the beginning of the podcast, the Matts defined the difference between crowdsourcing and crowdfunding. Unlike crowdfunding, crowdsourcing requires asking the service of a group of people to fulfill a task or project.

Here are what they had to say about crowdfunding and crowdsourcing:

There are a lot of ways to raise capital. Crowdfunding or crowdsourcing are not the only platforms to raise money. There a lot to consider in this area like the amount of money you need to raise, how much collateral you can offer, or the extent of the company’s control you are willing to render.

Crowdfunding campaigns do not come free. Kickstarter and IndieGoGo crowdfunding campaigns are not free. These crowdfunding platforms are businesses of their own and they need to take fees to keep their business going.

You need to stand out. Crowdfunding sites are flooded with a lot of campaigns, so how do you get the limelight? You need to market your campaign, stand out among the other crowdfunding campaigns. One marketing strategy is to have good videos and product documentation. Show a comprehensive video about your product and your business. This will help build credibility.

Deliver as promised. A lot of good businesses were tainted and even ruined due to delivery delays. Make sure that you fulfill deliveries according to what you promised your customers.

Listen to Episode 94 of the Startup Hustle Podcast – Crowdfunding

Here’s the transcript from Episode 94 of the Startup Hustle Podcast – Crowdfunding

Matt DeCoursey:And we’re back. Another episode of Startup Hustle. Matt DeCoursey here, with Matt Watson. Hi Matt!
Matt Watson:What’s going on?
Matt DeCoursey:I’m just doing stuff and things. How about you, buddy?
Matt Watson:I need some help.
Matt DeCoursey:Tell me.
Matt Watson:I need a whole crowd of people to help me find…
Matt DeCoursey:Money?
Matt Watson:Money.
Matt DeCoursey:Wow. That’s like crowdfunding.
Matt Watson:It is.
Matt DeCoursey:Do you think it’s worth it?
Matt Watson:I think it could be. I mean, I guess it depends are we talking about raising money or are we talking about like selling some shit on Kickstarter that actually like selling something? Cause those are different things.
Matt DeCoursey:We’re going to talk about both.
Matt Watson:All right.
Matt DeCoursey:So, today’s topic is is crowdsourcing or crowdfunding worth it? And we have a list of a few things that you might want to consider. And we’re going to kind of run through it. Have you ever crowdsourced? Let’s define crowdsourcing and crowdfunding, because crowdsourcing could be as simple as asking a group of people to help contribute something.
Matt Watson:Yeah, like helping me move.
Matt DeCoursey:Sure, and then you also have things where it’s paid like one popular crowdsourcing thing is 99 Designs. Where you create a contest.
Matt Watson:I’m a big fan of that.
Matt DeCoursey:I like it. I’ve used it a lot.
Matt Watson:I like it.
Matt DeCoursey:It’s actually where our podcast logo came from.
Matt Watson:They killed it!
Matt DeCoursey:Yeah, did a good job.
Matt Watson:For $99 bucks.
Matt DeCoursey:It was actually a lot more than that. Actually it wasn’t $99. It was more like $299 or something.
Matt Watson:A lot more?
Matt DeCoursey:Yeah, but…
Matt Watson:It’s your definition of a lot more?
Matt DeCoursey:So, well, I don’t know. I’d have to go back and look. That was in 2017, huh? But crowdsourcing, in that regard, like I just defined, was on 99 Designs. You create a contest and you say look, anybody can submit a logo and we’ll pick the one that wins and that person gets $299 bucks or whatever. And the reason that you’ll increase the value of said prize is to attract more people in your crowd…
Matt Watson:Right.
Matt DeCoursey:To source your idea. Crowdfunding is Kickstarter. Or whatever the things are that are out there that do that. That might be like, “Hey, I created a new kind of soap. But I can’t make it unless I sell 10,000 bars of it ahead of time.”
Matt Watson:Well, and there’s also platforms for just raising money.
Matt DeCoursey:Yeah.
Matt Watson:Where you’re not actually selling your product.
Matt DeCoursey:Correct. And we’re going to talk about those too. So, I think the first thing you have to consider and understand that these, that crowdsourcing/crowdfunding are not the only ways to raise capital depending on how much money you need to raise or how much collateral you can offer. You’ve got to also consider how much control of your company you’re willing to maybe give up. But you know, there’s a lot of ways to raise money. I personally think when it comes to crowdfunding, so I tried to do this with GigaBook in 2015. And we spent a whole lot of time, and a whole lot of effort, a whole lot of energy creating a crowdfunding campaign and we did it on IndiGoGo.
Matt Watson:That’s what it was.
Matt DeCoursey:And with that, you could basically buy a golden ticket, like a lifetime pass. But the problem was is we only sold like 4 of them.
Matt Watson:Yeah, I think it’s better. I don’t think it works very well for software subscriptions.
Matt DeCoursey:Yeah.
Matt Watson:I think it’s better for…
Matt DeCoursey:Products.
Matt Watson:Mycroft or something.
Matt DeCoursey:Yeah, yeah, yeah.
Matt Watson:Which is a…
Matt DeCoursey:Well, Mycroft had a very successful campaign.
Matt Watson:It’s a competitor to like Alexa.
Matt DeCoursey:Actually, Notigo. And a former guest.
Matt Watson:Yeah. And so that’s like a physical product or sometimes you see things on there that are like even like a movie or a video game.
Matt DeCoursey:Yeah.
Matt Watson:Or I think it’s better with physical objects that are like…
Matt DeCoursey:Tangible things.
Matt Watson:Like I’ll buy one of those things cause it’s cool. So, I’ll like hopefully a year from now I’ll actually get it.
Matt DeCoursey:Yeah.
Matt Watson:Like half the time you don’t get it.
Matt DeCoursey:You said “hopefully”. And we’ll get into that in a bit. But you know, I mean it’s a good way to also kind of a 2 or 3-fer. You can get some money to build something. It’s also a good promo.
Matt Watson:Take pre-sales.
Matt DeCoursey:It’s also a good promo.
Matt Watson:It’s like I’m pre-selling my product.
Matt DeCoursey:Pick up a little heat, and then if it goes well, well then obviously you have that to lean on. Your like, “Yeah, we sold out our Kickstarter campaign in a day or whatever.” So, now with that all that glitters is not gold. You do need to understand that you’re going to owe some fees. You know, Kickstarter and IndieGoGo and these platforms, well, they’re not doing this for public service. They are doing it to make money at their own business. And you know these crowdfunding platforms, well they get a commission.
Matt Watson:Is it about 5%?
Matt DeCoursey:I can’t remember, man. You know, I think it’s different. It depends on how much you are going to raise, how long your campaign is out there for, and then some of them you set a campaign goal like $10,000 and if you don’t even get to it, then it’s just incomplete.
Matt Watson:Right.
Matt DeCoursey:And it’s like everything is refunded.So, you know, on a podcast where I had prepared more than just items about what to consider with crowdsourcing or funding, I probably should have looked up the fee structure.
Matt Watson:Yeah.
Matt DeCoursey:This is where if we had a real producer here in the studio, we could be like, “Johnny” and then they’d talk in our ear and stuff like that.
Matt Watson:Oooooo
Matt DeCoursey:We’re getting there.
Matt Watson:Yeah.
Matt DeCoursey:We’re getting there. I mean, we still only draw like 100 people when we do them live. So,
Matt Watson:Well, there was the one day we sold out the arena. It was 96,000 people, right?
Matt DeCoursey:You know, the final count came in and I didn’t realize that we actually made it over 100,000.
Matt Watson:Wow!
Matt DeCoursey:I know. It was pretty impressive. So you know, keep in mind that these platforms are going to take a fee so if you are selling you know X item for $100. I don’t know, man. I’ve seen all kinds of stuff. I know that a lot of the people that…you know, there is a whole tribe of individuals that really get into you know, these kind of items. They are looking on those sites for what’s coming out.
Matt Watson:Yeah, that’s cool!
Matt DeCoursey:What’s coming out next.
Matt Watson:It’s cool new stuff.
Matt DeCoursey:It’s cool. You get something new.
Matt Watson:And you don’t get most of them.
Matt DeCoursey:Is that true?
Matt Watson:I’m telling you.
Matt DeCoursey:I know you’ve had that happen.
Matt Watson:You either don’t get them, or when you do get them, they are a piece of crap.
Matt DeCoursey:Have you had that happen?
Matt Watson:Yeah.
Matt DeCoursey:How much stuff have you bought? Let’s talk about…
Matt Watson:I’d say like half a dozen times.
Matt DeCoursey:OK
Matt Watson:Yeah.By the way, Kickstarter’s fee is 5%. And I think you also pay a payment processing fee on top of that.
Matt DeCoursey:Yeah, so that’s more like 8%.
Matt Watson:Yeah.
Matt DeCoursey:OK. So, what did you buy?
Matt Watson:That doesn’t sound so bad though.
Matt DeCoursey:What did you buy?
Matt Watson:So, I bought some really cool wooden puzzle things you put together to make a car or different things that are made 100% out of wood. It’s called U Gears. That was really cool.
Matt DeCoursey:So that actually arrived?
Matt Watson:Yeah, it actually arrived.
Matt DeCoursey:And it was cool?
Matt Watson:And it was very cool.And then I did one that was some kind of watch you were supposed to wear that could tell you how many calories you ate and burned in a day.
Matt DeCoursey:How did that work out?
Matt Watson:Yeah, I don’t think that worked.
Matt DeCoursey:Did it arrive?
Matt Watson:It did arrive. I never really used it.
Matt DeCoursey:OK
Matt Watson:And then I…
Matt DeCoursey:Did it work?
Matt Watson:I don’t think so.
Matt DeCoursey:Did you try?
Matt Watson:No, I don’t think it really worked. And then I did another one that I think was supposed to track my kid, like where their location was at all time. I think I’m still waiting for that one to show up.
Matt DeCoursey:OK
Matt Watson:Yeah so
Matt DeCoursey:But as a buyer, there’s reasons that that can occur. Like obviously people that are doing these things that are trying to attract capital.
Matt Watson:Yeah.
Matt DeCoursey:And maybe they didn’t get enough of it and maybe something came off the wheels on the way there. I don’t know.
Matt Watson:Right. Yeah, yeah. Yeah, I mean, especially with the ones that are building hardware. Like, that shit’s hard.
Matt DeCoursey:Yeah.
Matt Watson:And they’re like, “Oh, we’re going do this. And we raised a million dollars.”
Matt DeCoursey:Very inexact.
Matt Watson:Whoa. Can’t figure how to source this stuff from China and then it doesn’t work. The quality problems and the firmware doesn’t work. And blah, blah, blah, blah. It goes on and on.
Matt DeCoursey:I was watching when we were talking about, you remember all of the business documentaries that we were supposed to watch and then review and then never did?
Matt Watson:I watched all of them. You didn’t watch them.
Matt DeCoursey:Oh my God. I had watched all of them by the time we recorded. You were guilty of not watching any of them. But one of them was called “Print the Legend”. And it was about 3D printing. And one of the companies that was one there, I can’t remember what the name was but they had done a Kickstarter campaign. I mean, I’m talking they sold millions! And they were supposed to deliver X number of months later and they had not. And by the time they were filming, they were 3 or 4 months behind. And they were just trying to get these things out. And, you know, if you’re considering doing something like this, you’ve got to be ready to live up to your promises. So, in order to do that, you need to have a plan in place. You need to, you’ve got to have an idea of what you’re using the money for. You’ve got to have some kind of plan. And in some cases, that’s partially what you might even be presenting.
Matt Watson:Matt, I think you owe it to the future backers, that you’ve got your shit together.
Matt DeCoursey:That’s my point.
Matt Watson:You know, I need this amount of money, and I can actually do this. I know what I’m doing. I just need the money.
Matt DeCoursey:Yeah.
Matt Watson:Please don’t scam us if you don’t have your shit together.
Matt DeCoursey:And you know, that’s part of the presentation too. Like, let’s just say you and I, we’re going to launch a product. I, at least…
Matt Watson:It’s going to be a smoothie machine that makes mango smoothies.
Matt DeCoursey:Man, we had that. There’s someone, one of our guests is already doing that. Yeah.
Matt Watson:We need to raise…
Matt DeCoursey:You’re still thinking about Thirsty Coconut.
Matt Watson:About $2000. And we’re going to have to do it on GoFundMe. So we can have one in our office.
Matt DeCoursey:I think that…
Matt Watson:Is that what we’re talking about?
Matt DeCoursey:I think we can get one for free. Yeah, let’s work on that.
Matt Watson:All right.
Matt DeCoursey:So, all right. In order to attract people to buy, the whole thing is like A. It has to be cheaper. You’ve got to have some kind of incentive. And you know, I’ve seen all different kinds of stuff. Sometimes it will just be like you know, sometimes they’re just asking you for money. Like you get a t-shirt and a poster but we want $500 bucks but they’re clear about it. They’re like hey, look, we’re trying to bring this to the world. And maybe it’s something that does something that contributes to the greater good of society.
Matt Watson:Well, if you’re on Kickstarter or something, talking about having a plan in place and marketing, like, you’ve got to really stand out. And you’ve got to have really good videos and product documentation and all that stuff.
Matt DeCoursey:And that’s part of that plan. If you don’t have that then you’re just dog shit. No one’s going to buy it. You need to have a video and you need to talk about…it’s a presentation, man. It’s a commercial.
Matt Watson:Yeah.
Matt DeCoursey:And you also gotta talk about, you’re going back to saying like if you and I were launching something, I like to feel that we’re credible. Meaning like we’re not crooks. So, that could be part of the presentation. Like hey look, we’re two guys trying to solve a problem. We have a history of doing things and we’re credible. If that’s part of your story, then you need to tell that because it’s going to make me feel a little better about making a purchase cause I bet a lot of people that go into these things are really leery.
Matt Watson:You know, we started a podcast together. We started a business together. We need to do a Kickstarter together. I’ve got the perfect idea.
Matt DeCoursey:I don’t know if I want to hear it. What is it?
Matt Watson:A bitcoin wallet for our cell phone.
Matt DeCoursey:Didn’t someone already do that?
Matt Watson:No. Ours is going to be better.
Matt DeCoursey:OK
Matt Watson:Because everybody uses bitcoin for everything.
Matt DeCoursey:Man. You wish.
Matt Watson:We’re going to be billionaires.
Matt DeCoursey:You wish!
Matt Watson:3 comma club here we come!
Matt DeCoursey:Dude, we even took our shitty old computers that were mining bitcoin and we didn’t even plug them back in. Because we were. Maybe we should. I’ve noticed that since…
Matt Watson:You’re crushing my dreams.
Matt DeCoursey:Sometimes the best thing you can do is tell someone to not do something.
Matt Watson:Is not launch your Kickstarter?
Matt DeCoursey:Yeah. Well, for your bitcoin wallet. Which was probably a fucking free app that like let’s be realistic here.
Matt Watson:Okay. Okay. Well, we’ll figure out another idea.
Matt DeCoursey:OK. Well, what would your incentives be with this, Matt? Like what are you going to do?Is the incentive that it is free?
Matt Watson:I’m going to send you a real bitcoin, like the minted ones. I have one in my desk.
Matt DeCoursey:This has got so many holes in it.
Matt Watson:That’s my free incentive, is you get a physical bitcoin that’s not worth anything. Just like our app.
Matt DeCoursey:Oh my God.
Matt Watson:But some are cool. They have incentives like talk to the team or a free shirt or buy 3 for the price of 2.
Matt DeCoursey:Sometimes it’s just cheaper.
Matt Watson:Yeah, cheaper.
Matt DeCoursey:Sometimes it’s just cheaper. And you know, so why does a business want to do that? Well, A. You’ve got to get some product out there and just try to do it. But it could also have to do with maybe your additional orders on top of what they’re already planning on building might drive their production costs down quite a bit and it’s a win-win.
Matt Watson:Right, yep.
Matt DeCoursey:So, I think the thing that people don’t think about when it comes to crowdfunding is, like we were just saying, you have to, you actually have to market your promo.
Matt Watson:Yeah, you gotta, you gotta…
Matt DeCoursey:You don’t just build it and they come. Like I’m sure there’s a few that get in there but there are a ton of things in Kickstarter and IndieGoGo, all these things. There’s a ton of stuff in there. So how do you get found? Cause it’s algorithmic.
Matt Watson:Right.
Matt DeCoursey:As people would buy some of this stuff that we had, like we jumped up on lists, but they’re clearly going to put the most popular stuff at the top because they want you to buy it.
Matt Watson:That’s why we say, you can be the coolest kid on the block but being the coolest kid in the city or the coolest kid in the world is a whole different thing.
Matt DeCoursey:Yeah.
Matt Watson:And all of a sudden you’re up against everybody in the world.
Matt DeCoursey:Yeah.
Matt Watson:And you may not be so cool anymore.
Matt DeCoursey:Yeah. Is that directed at me?
Matt Watson:Yeah. You’re the coolest kid on your block. That’s it.
Matt DeCoursey:But I live on a huge block.
Matt Watson:Yeah, you’re pretty cool.
Matt DeCoursey:Yeah, thanks man.
Matt Watson:On your block.
Matt DeCoursey:I appreciate that. But you know, back to the marketing strategy. For those of you listening, we just really are really proud to bring you all of these golden nuggets and gems by Matt Watson. You know what I think will break this up a little bit, I think it’s time for a mixed tape moment.
Matt Watson:All right.
Matt DeCoursey:For those of you who have been listening, we have recently invested in Mixed Tape, the game. And…
Matt Watson:It’s fun to play so we’re going to do a card right now.
Matt DeCoursey:Yeah, we’re playing the card game but soon we’re going to have the digital version. What song or band changed the way you think about music?
Matt Watson:Ooooooo
Matt DeCoursey:It was Phish for me. That’s when I discovered the jam.
Matt Watson:Mmmm
Matt DeCoursey:Been a huge fan ever since. I was probably, I was in college.
Matt Watson:The way I thought about music, I don’t. That’s a really good question.
Matt DeCoursey:This is a tough one. A. There’s only 2 of us so I would have to vote for you and you would have to vote for me so we instantly create a stalemate.
Matt Watson:Yeah, there’s no winners here.
Matt DeCoursey:But this is just an introspective moment. Because knowing, OK so if you know that my answer was Phish, or that it was a particular song, that actually says a lot about me. It says I used to be a hippie. I still could be, who knows? But overall, like it tells me a lot. You didn’t have some, there wasn’t something that moved you along the way?
Matt Watson:Maybe I’ll say Nirvana.
Matt DeCoursey:OK. Okay.Nirvana was definitely, is definitely. So that for you, you were probably like in middle school when that came out.
Matt Watson:Yeah. Yep.
Matt DeCoursey:So, what was it about it?
Matt Watson:I don’t know. Just that whole genre.
Matt DeCoursey:The angst?
Matt Watson:Of music. And I just loved the album. And all that stuff, right?
Matt DeCoursey:Yeah, that’s a good choice. Definitely like…
Matt Watson:That’s like right when I was in those teenage years.
Matt DeCoursey:It was really the leader of the whole Seattle grunge scene that kind of came to follow after that.
Matt Watson:Them and Green Day.
Matt DeCoursey:Yeah. Oh man, I love Green Day.
Matt Watson:Trailblazers.
Matt DeCoursey:Some people don’t.
Matt Watson:Weezer.
Matt DeCoursey:Huh? You know, I never got into Weezer. I know they were just in Kansas City but, overall I did for Nirvana I go back way to their way, way, not even, like the Nevermind album was probably the first one. That’s the one with like the baby in the swimming pool.
Matt Watson:Yes, the blue album.
Matt DeCoursey:I like the ones before it. They had like Bleach and Incesticide and those were the really like raw kinda punk rock kinda things. But yeah, love me some Nirvana. And then I also liked Phish, kinda the other end of the spectrum.
Matt Watson:Yeah.
Matt DeCoursey:I just love the jam, man. I just love the improvisation. So anyway, back to crowdsourcing. You know, Mixed Tape, the game, this would have been the perfect crowdfunding. This is the perfect thing. It’s a little box of cards. We also have an agreement with Breaking Games who distributes the physical product of this.
Matt Watson:It’s at every Target, right?
Matt DeCoursey:It is. It is. And it’s also on Amazon. You know, you look at this and that’s something you need to consider too when you’re talking about a plan. So let’s say that Mixed Tape, the game, which I am holding up here as if someone is watching me on TV.
Matt Watson:You look beautiful.
Matt DeCoursey:Thank you. I, as a product spokesperson, I feel I have a strong career on radio. Of all 43 year old men hosting this podcast, I definitely look the best. You talk about having a plan, so you also have to think about what happens if things go well. This would have been a great example cause this is $20 item. If we had sold 100,000, how were we going to deliver them?
Matt Watson:One at a time.
Matt DeCoursey:Well, yeah, but think about that. You’ve got to also keep in mind…
Matt Watson:Is there any other way? One at a time.
Matt DeCoursey:Yeah, there’s a lot of different ways. You can use like a fulfillment or drop shipping company. Like for example, I actually bought this off of Amazon. We own part of this. But we bought the deck off of Amazon because that’s how it is distributed.
Matt Watson:Yeah.
Matt DeCoursey:And it was easier for me to do that then try to deal with getting Joel to bring me another deck over or whatever. I just…
Matt Watson:Amazon Prime, baby!
Matt DeCoursey:I know. It got there really fast. And that’s why Amazon is, sometimes people look at it and they think, god I paid 30% for Prime. I’m like yeah, they are also your warehouse. They are your fulfillment site. So you’ve got to think about how you’re going to do that. And also give some consideration in your plan to the fact that you’re like, “Oh yeah, but we sold these for say we sold them for $10 a piece.”
Matt Watson:Right, yeah.
Matt DeCoursey:We might be in for a very unpleasant surprise when it comes to fulfillment. It probably costs $3-$4 to ship these. You’ve got to buy the boxes. Gotta pay for the shipping.
Matt Watson:Yep.
Matt DeCoursey:You’ve got to stuff them. You’ve got to print labels. You’ve got to deal with all of that. You’ve got to deal with returns. So how are you going to deal with that?
Matt Watson:Yeah. It’s a lot to deal with.
Matt DeCoursey:Is this why all these Kickstarter campaigns fail?
Matt Watson:Some of them for sure.
Matt DeCoursey:In the marketing strategy, I think the suggestions I would have is a video. If you can do a video…
Matt Watson:A really good video.
Matt DeCoursey:I mean, like a really good video is a big key in these things. Did you see a video on the stuff that you bought?
Matt Watson:Yeah, a lot of them did.
Matt DeCoursey:I’ve never bought something off of one of these. I just never have. I think that I’m inherently too cynical to believe that any of it would arrive or be cool.
Matt Watson:Well, you’re mostly right about that.
Matt DeCoursey:Yeah, so, but a video is a big plus. You’ve got to have a good description. Pictures, lots of pictures. Clear pictures, not crap pictures.
Matt Watson:Why should I buy this thing? Why is it different?
Matt DeCoursey:What are the benefits of what, this is the benefit of what we are doing. You have to clearly and openly be realistic about when they should receive it.
Matt Watson:I did another one that was like a charging station. That all of a sudden you were supposed to be able to connect like 10 phones to it.
Matt DeCoursey:Do you have 10 phones?
Matt Watson:Ah, and it never shipped.
Matt DeCoursey:That’s lame.
Matt Watson:Yeah.
Matt DeCoursey:I could use one of the those at the Sprint Center. If it arrives can we bring it down?
Matt Watson:Yes.
Matt DeCoursey:Did you buy it like 2 years ago?
Matt Watson:Oh yes. It was maybe 5 years ago now.
Matt DeCoursey:What happens? Do they communicate with you at all?
Matt Watson:Yeah. Delayed, delayed. Apple has a new lightning connector and we can’t license and use the connector, blah, blah, blah. Whatever. Bullshit. Gimme my money back. You didn’t get me my product.
Matt DeCoursey:So, with that, you also, I mean, you are going to have to consider placing some stipulations or maybe some of these platforms might have them cause here’s the thing is Kickstarter definitely wants you to deliver whatever it is you say you are going to deliver. So you’ve got to be ready. Like Kickstarter demands that it’s campaigns revolve around a tangible product that customers can use.
Matt Watson:There we go.
Matt DeCoursey:No software.
Matt Watson:None.
Matt DeCoursey:And once again, if you don’t hit your goal you get none of the proceeds. So, you are way better to set, okay, you can set a low goal and then keep selling way past that.
Matt Watson:Sure. Absolutely.
Matt DeCoursey:You can say your goal is to raise $2500 and you can sell $25 million. But you don’t want to say it’s $25 million cause if you sell $24 million, you ain’t getting any of it. Ain’t no one got time for that.
Matt Watson:Yeah, you’ve got to set the bar low.
Matt DeCoursey:For your bitcoin wallet, is that just going to have it, is that a one dollar goal?
Matt Watson:I want to collect at least 4 bitcoins.
Matt DeCoursey:Oh geez. So like $23,000?
Matt Watson:Well, it changes everyday.
Matt DeCoursey:I know it came up a little bit.
Matt Watson:It could be $10,000. Could be $100,000. We don’t know yet.
Matt DeCoursey:You definitely want to look into what the stipulations are. Like I said, we did GigaBook was on IndieGoGo and that’s clearly why we did it. I mean, I don’t even remember that. Then back to the last kind of tip here is and we’ve said this again but I want to reiterate is you know, you need to be ready to deliver on these promises. Back to the Print the Legend documentary, so the maker of that, they’d had some kind of delay. I can’t remember if it was funding or if it was development or something like that. These folks had just destroyed their reputation over being late.
Matt Watson:Yeah.
Matt DeCoursey:You know, like because…
Matt Watson:Delays, delays, delays.
Matt DeCoursey:What’s going to happen is if you say you are going to deliver it in December and now you are getting into February and March, people are going to be talking about how you scammed them, just all kinds of, and it’s reputation management you cannot get your arms back around. Because once people start talking about how it’s crap or it’s, I don’t know. Obviously, businesses ruin their reputation before they ever had one to ruin.
Matt Watson:It’s kind of like Tesla now. Whoever thinks they are going to hit a deadline on shipping a new car design.
Matt DeCoursey:It’s true. I’m just
Matt Watson:Expect it to be delayed.
Matt DeCoursey:I’m ordering like 40 of them cause the robo-taxi.
Matt Watson:Yeah, you ordered all Roadsters, right?
Matt DeCoursey:Yeah, cause the most expensive car, it’s like Uber X, right?
Matt Watson:Well, you can get the people there faster so you can go through more people quicker. No?
Matt DeCoursey:Speaking of delivering on your promises, a couple things like you know, it’s really back to having that plan. If you get this thing funded like is what you are promising and what you are trying to deliver even a reality, like where are you manufacturing these things? Are you in a line behind 20 other products that are waiting to be made? You know, there are a lot of things to look at. Well, here it is. For example, you might to expect to ship a product by December but fail to compensate for production delays or miscalculate the shipping costs.
Matt Watson:Yeah. Taxes, import taxes, all those things.
Matt DeCoursey:It just shows you how knowledgeable I am about these things cause I hadn’t even gotten to that point on our notes but really the real question here was is crowdfunding worth it? I don’t think, I’m not really sure we can arrive at a conclusion.
Matt Watson:I think for something like Mixed Tape, it could have been perfect.
Matt DeCoursey:Yeah.
Matt Watson:Mycroft, I think it worked well.
Matt DeCoursey:I actually think he did a Kickstarter on these. We’ll have to get Joel back in the next time he’s in for the Mixed Tape update.
Matt Watson:I think for certain things it can work great.
Matt DeCoursey:Yeah. And I really do want…
Matt Watson:Probably the simpler the product, the better.
Matt DeCoursey:Yeah.
Matt Watson:Like the high tech gizmos and stuff that are prone to software problems, hardware problems, manufacturing problems, like…
Matt DeCoursey:Like your bitcoin wallet?
Matt Watson:Yeah. I’m going to scrap that idea.
Matt DeCoursey:Okay. That lived and died within the context of a podcast episode. I mean, is that the conclusion we came to? That it’s maybe a little more worth it for tangible products?
Matt Watson:I think so.
Matt DeCoursey:Okay, now…
Matt Watson:I think a really simple product, not software.
Matt DeCoursey:You mentioned, we were talking something earlier about equity funding. Is that actually out now?
Matt Watson:Yeah, it is.
Matt DeCoursey:I thought that there was like some regulations around that?
Matt Watson:No, there’s some different things that are out there. I’m trying to remember what it’s called.
Matt DeCoursey:So is that exist? Is that literally for funding your company? Is that where you can have like 50,000 founders at $100 a piece?
Matt Watson:Yeah, like Crowdfunder is one of them. And I think there’s others out there.
Matt DeCoursey:And that’s for selling a part of a company?
Matt Watson:Yeah.
Matt DeCoursey:OK.
Matt Watson:Yep.
Matt DeCoursey:So, at one point that wouldn’t have been legal.
Matt Watson:I’m not exactly sure how it works. I guess we should have did our research.
Matt DeCoursey:Maybe we should launch a crowdfunding campaign for a new podcast producer.
Matt Watson:That’s a really good idea.
Matt DeCoursey:Or we should crowdsource it.
Matt Watson:I like that idea.
Matt DeCoursey:Should we do both? Anyway, so the episode in review, if you are crowdsourcing that’s something. I really am a huge fan of crowdsourcing, by the way. Like, in general. Sometimes the simplest and most common, people don’t even realize they are crowdsourcing is on Facebook. When they’re like, hey who can give me a great recommendation on where I can get my dog washed today? You are technically crowdsourcing that solution. You are asking the crowd to give a recommendation or to tender solutions.
Matt Watson:Every time I use Uber am I crowdsourcing who want to come get me?
Matt DeCoursey:Um, maybe not so much.
Matt Watson:No?
Matt DeCoursey:No, I don’t think so. Crowdfunding is back to like the Kickstarter things.
Matt Watson:I really like GoFundMe.
Matt DeCoursey:Yeah, but GoFundMe is more of a, I mean, that’s more of like for causes.
Matt Watson:Well, it’s like grandpa died. We need money for the funeral.
Matt DeCoursey:Do you think people are becoming desensitized to some of that?
Matt Watson:No. I’ve donated to them.
Matt DeCoursey:Yeah, and I have to. Even Facebook’s got like a built in one now, right?
Matt Watson:Oh, I don’t know.
Matt DeCoursey:They do. They do. You can make like a donation or raise money or whatever. I don’t know. I don’t know. What are you going to go fund?
Matt Watson:I donated somebodies funeral. Different things.
Matt DeCoursey:I gave money, now that I think about it. A friend of mine’s had a son with special needs and he needed something. I actually gave like $500.
Matt Watson:That’s good, man. I donated quite a bit to a funeral.
Matt DeCoursey:Yeah, I did.
Matt Watson:It was my ex-father-in-law.
Matt DeCoursey:I did a nice amount to that but largely because as it was someone who is always been very kind and hospitable to me and I knew that it was the type of person that would really appreciate that. And then I left myself fully anonymous. They say the highest form of giving is without expectation in return.
Matt Watson:So, sure.
Matt DeCoursey:Then I want to round out, there are in fact equity business funding that went live.
Matt Watson:Yeah, Crowdfunder is one of them.
Matt DeCoursey:OK. So, if you are going to do that you have to give an idea, like what are you giving up?
Matt Watson:And you still have to market it.
Matt DeCoursey:Yeah.
Matt Watson:And promote it.
Matt DeCoursey:Yeah. How many, are there just a ton of businesses in there?
Matt Watson:I haven’t looked.
Matt DeCoursey:Oh. Well it shows you how effective that is. Well, hopefully we brought you a little bit of insight about our opinions on crowdsourcing/crowdfunding/equity funding and charitable funding. I don’t know.
Matt Watson:It’s all similar. Yep.
Matt DeCoursey:Let’s play one more card of Mixed Tape. Then get off this cast.
Matt Watson:All right.
Matt DeCoursey:All right. What was your go to, sad, melancholy break up song?
Matt Watson:Oooooo…you know,
Matt DeCoursey:Cause I’m a creep
Matt Watson:I’ve got to go to actually Linkin Park, “In the End” cause in the end it really doesn’t matter.
Matt DeCoursey:It has to be sad and melancholy?
Matt Watson:Well, maybe I was sad and melancholy.
Matt DeCoursey:I’m going back to fuck you, bud.
Matt Watson:I needed a rock song.
Matt DeCoursey:Am I allowed to use Fuck You by Ceelo Green on like everything?
Matt Watson:Yep.
Matt DeCoursey:Do you realize the easy way to play defense against me in Mixed Tape is to just pick that song?
Matt Watson:So you can’t pick it?
Matt DeCoursey:Possibly. Anyway, well, thanks. I’m going to go buy some stuff.
Matt Watson:All right.
Matt DeCoursey:Online. See you next time.